0

0

0

0

0

0

0

0

0

This article is more than 1 year old.

This variant of SBI fixed deposit pays interest only at time of maturity

Mini

State Bank of India (SBI) offers a variant of fixed deposit (FD), known as reinvestment plan, where interest is paid out only at the time of maturity.

This variant of SBI fixed deposit pays interest only at time of maturity
State Bank of India (SBI) offers a variant of fixed deposit (FD), known as reinvestment plan, where interest is paid out only at the time of maturity. Regular interest is added to the principal and compound interest is calculated and paid thereon. This is unlike a general FD, where interest is paid out at a regular frequency during the period of deposit.
Here are key things to know about SBI reinvestment plan:
Eligibility
Resident individuals singly or jointly, minor (himself/herself or through his/her guardian), karta of HUF, firm, company, local bodies and any government department are eligible to open this account.
Investment limits
The minimum amount one can deposit in SBI reinvestment plan is Rs  1,000. There is no maximum limit on the investment.
Tenure
The minimum and maximum periods for which deposits can remain in this account are 6 months and 10 years respectively.
Interest rates
Interest rates on SBI reinvestment plan are the same as on fixed deposits. The interest rate payable to SBI staff and SBI pensioners is, however, 1 percent above the applicable rate. The rate applicable to all senior citizens of age 60 years and above is 0.50 percent above the applicable rate.
Taxation
TDS is applicable as per Income Tax Rules. Form 15G/H can be submitted by the depositor for exemption from tax deduction as per Income Tax rules.
Premature withdrawal
A premature withdrawal facility is available on SBI reinvestment plan. For retail fixed deposit up to Rs 5 lakh, the penalty for premature withdrawal is 0.50 percent (all tenors); for retail fixed deposits above Rs 5 lakh but below Rs 1 crore, the applicable penalty is 1 percent (all tenors).
The interest is 0.50 percent or 1 percent below the interest rate applicable at the time of deposits for the period deposit remained with SBI or 0.50 percent or 1 percent below the contracted rate, whichever is lower. However, no interest is paid on deposits which remain for a period of less than seven days, according to SBI.
Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
next story